The Financial Services Compensation Scheme has placed London-based City & Merchant Ltd under investigation after it entered liquidation.
The firm provided corporate finance advice, fund management and trading services and had restrictions placed on it by the FCA in June 2024.
It was told by the FCA it had to immediately cease carrying on all regulated activities for which it had a Part4A permission.
The regulator said the reason for the restriction was because the firm was failing, or was likely to fail, to satisfy the threshold conditions.
It also said it had “serious concerns” that the firm was not capable of being effectively supervised by the authority.
According to the first supervisory notice, the firm repeatedly failed to report all transactions it had executed since April 1 2023.
The regulator had “serious concerns” the firm had not been “open and cooperative” with the authority regarding its transaction activity contrary to principle 11 and that any information provided by it had been either “incomplete or inaccurate”.
City & Merchant had not submitted audited accounts for the year March 31 2023, which were due for submission by July 28 2023, according to the notice.
On September 11 2024, the firm was placed in liquidation with the directors appointing Dermot Coakley and Shaun Walker of WSM Marks Bloom LLP to wind up the firm for the benefit of its creditors.
According to the FCA, the joint liquidators will contact customers with further details of how they are affected.
The FSCS opened to customer claims on September 13 but it said the claims would not be immediately passed on to the claims processing teams for assessment.
This is because the lifeboat scheme will be investigating the firm to determine whether claims meet the qualifying conditions for compensation which it said may take some time.
The FSCS has warned customers to be wary of scams.
alina.khan@ft.com
